Who needs data centres? 🤣🤣🤣
Digital Culture Playbook // 30.01.25
Happy Thursday, gang, & Happy Chinese New Year to those who celebrate it! This week, we get our heads around the AI gamechanger that shook the stock market this week and catch up with the stories you might have missed. Let’s get into it!
The layout and premise of the newsletter is simple: a once-a-week sheep-dip of tech, culture, policy and research stories, which I hope you enjoy. If you think friends or colleagues would benefit, please share with them so they can subscribe on Substack or LinkedIn.
Best wishes, Alex.
1. Tech innovation
This week, America’s AI sabre was well and truly rattled by DeepSeek R1, a new open-source reasoning model out of China, which delighted enthusiasts, dented the U.S. stock market and undermined the industrial semiconductor complex in just a few days.
DeepSeek R1 was launched (not coincidentally) on the same date as US47’s inauguration before soaring up the download charts at such an incredible pace, the makers had to restrict access to avoid crashing. Venture capitalist Marc Andreessen called it “AI’s Sputnik moment,” likening it to the shock of the launch of the USSR’s first satellite.
Similar in aspect to OpenAI’s reasoning model, o1, the things that marks R1 out as different are: 1) it appears to be more advanced/capable; 2) being open-source, it doesn’t rely on ‘black box’ secrecy; and critically 3) it requires far less computational power than we have all been led to believe is necessary for these sorts of large AI models.
This last point is significant because - despite several years of sanctions activity to prevent powerful semiconductors being used by the Chinese, and following hot on the heels of last week’s announcement of ‘up to $500Bn’ being invested in U.S. data centres to win the artificial intelligence arms race - DeepSeek’s model doesn’t require anywhere near the same access to chips or data processing capabilities to run. As MIT Technology Review wrote: “Rather than weakening China’s AI capabilities, the sanctions appear to be driving startups like DeepSeek to innovate in ways that prioritise efficiency, resource-pooling, and collaboration.”
This is what caused the uncertainty which battered the BigTech stocks. Obviously the new administration doesn’t recognise climate change, but there is a significant (if not yet fully quantifiable) energy dependency on the all-in-on-data-centres policy, exacerbated by the fact that many of the American states earmarked for new facilities are already highly dependent on coal and other ‘dirty’ fossil fuels.
Because R1 is open-source, there is hope that in dissecting the model, researchers will be able to find new ways to create large language and reasoning models that are far less dependent on high energy consumption and generally better for the environment.
2. Policy & Research
“Growth ambitions put CEOs on the verge of generational change” says the headline of new research published this week by consulting firm PwC.
The UK slice of the 28th annual global survey of CEOs finds that 98% of them expect to make material changes to their business or operating model this year, while 34% believe their business won't be economically viable within 10 years on its current course — up from 21% last year.
A lot of the research focuses on digital transformation, suggesting the role of CEO in articulating and embodying a digital culture is more important than ever. More than half of CEOs (54%) are personally sponsoring transformation projects, while nearly a third (31%) have appointed a dedicated transformation leader within their business, with the same proportion building a dedicated transformation team.
On barriers to digital transformation - in numbers that echo Data Strategy Alliance research - 47% of UK CEOs cite skills gaps, 44% say understanding ROI, 26% cite high levels of risk with technology investments and 17% say their organisation suffers from enterprise-wide lack of trust in tech.
Of course, no CEO survey in 2025 would be complete without canvassing them for their views on generative AI: in response to what seems a fairly disingenuous question, the majority of respondents say they've seen little to no change to profitability (79%) or revenue (78%) resulting from their use of GenAI (bearing in mind most of them only started investing in it a few months ago🤦♂️)
3. Reading List
Over the past five decades, the tech industry has grown into one of the most important sectors of the global economy. Silicon Valley - replete with sprawling office parks, sky-high rents, and countless self-made millionaires - is home to many of its key players. But the origins of Silicon Valley and the tech sector are much humbler. At a time when tech companies’ influence continues to grow, The Big Score chronicles how they began.
One of the first reporters on the tech industry beat, Michael S. Malone recounts the feverish efforts of young technologists and entrepreneurs to build something that would change the world(and score them a big payday). Starting with the birth of Hewlett-Packard in the 1930s, Malone illustrates how decades of technological innovation laid the foundation for the meteoric rise of the Valley in the 1970s. Drawing on exclusive, unvarnished interviews, Malone punctuates this history with incisive profiles of tech’s early luminaries-including William Shockley and Steve Jobs-when they were struggling entrepreneurs working 18-hour days in their garages. And he plunges us into the darker side of the Valley, where espionage, drugs, hellish working conditions, and shocking betrayals shaped the paths for winners and losers in a booming industry.
4. Playbook picks & worthy clicks
DeepSeek’s popularity quickly made it a cyber attack target (Guardian)
Alibaba claims its new AI model surpasses DeepSeek’s (WSJ)DeepSeek’s success is emboldening other Chinese startups (FT)
Step aside finance bros - there’s a more dateable profession in town (NY Post)
Researchers say Central Europe’s power grid is vulnerable to attack (Ars Technica)
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Wishing you all a fab weekend when you get there!